Events Galore

Join us this Monday at noon on Capitol Hill for a briefing on ?Innovations in the health care marketplace.? Speakers will highlight advances that are revolutionizing the industry in health insurance, financial services, long-term care, and information technologies.

You can register by responding to this email to tell us you are coming. It’s in room B-369 of the Rayburn House Office Building, and we are jointly sponsoring this conference with the Council for Affordable Health Insurance. Lunch will be provided.

Then on Wednesday, we are hosting a reception to celebrate the launch of the Center for Medicine in the Public Interest, a new think tank headed by former FDA associate commissioner Peter Pitts and by Bob Goldberg, a former senior fellow at the Manhattan Institute.

Join us at the beautiful new Mandarin Oriental hotel in Washington at 5 p.m. on Wednesday, June 28, to celebrate this new organization and their blog, Drugwonks.com.

And if the week weren’t already busy enough, we will be hosting our second annual Consumer Choice Community conference Monday and Tuesday, with members coming from around the country to work with White House officials, senior state policymakers, and industry leaders in developing the next generation of policy ideas.

And June already has been filled with conferences and briefings!

Earlier this month, we invited Consensus Group members to talk with Gov. Ernie Fletcher about his first-in-the-nation Medicaid modernization plan based upon the new flexibility allowed in the Deficit Reduction Act. Gov. Fletcher expects to cover the same number of people and save the state $1 billion over 7 years by better tailoring benefits to specific categories of recipients. Here’s a summary if you would like to read more.

This was another in a series of briefings we are hosting in conjunction with the Council for Affordable Health Insurance to hear from visionary governors about what they are doing to introduce innovative health reforms in their states.

And our Consensus Group also met with top officials from Massachusetts to talk about the state’s universal coverage plan. There were many take-aways, but the biggest insight was the unique financial and political landscape in Massachusetts that created such a dramatic bi-partisan compromise and how difficult it will be for other states to replicate those dynamics.

Secretary Tim Murphy of the Executive Office of Health and Human Services and Cindy Gillespie, counselor to the governor, explained that Massachusetts stood to lose $385 million in federal funds, primarily for hospitals that treat a disproportionate share of indigent patients if the state did not demonstrate that the money was being better spent.

This got the attention of the hospitals, the legislature, and businesses in the state who recognized that inaction was not an option. Massachusetts also has an edge with a smaller percentage of uninsured citizens and additional resources already on the table to throw into the pot. They knew they had to keep working until they got a bill that would pass.

The governor’s advisors really do believe that the free-market ideas in the plan will prevail. As you know, we have serious questions about the cost and therefore the feasibility of the plan, but we very much appreciated their making time to explore the details in greater depth and to hear that they believe that their free-market optimism will overcome the weight of the new bureaucracy.

Grace-Marie Turner

RECENT NEWS ARTICLES AND STUDIES:

Viewpoint on healthcare

Countering counterfeits

Squeezing the balloon: The futility of pharmaceutical cost containment

Scott Gottlieb’s speech before the American Medical Association

Health care information technology: Getting the policy right

The doctor is (plugged) in

VIEWPOINT ON HEALTHCARE Source: Tax Notes, 06/12/06

?No issue has stumped policymakers more than how to provide healthcare to its citizens in an efficient and fair manner? and ?No failure of political nerve stands out more than the unwillingness to tackle the tax break for employer-provided insurance,? writes the Urban Institute’s Gene Steuerle in a special section of Tax Notes devoted to an indepth analysis of the tax treatment of health insurance. The subsidy received from the existing tax break continues to grow and to perversely increase the number of uninsured by driving up the price of health insurance. ?No politician would propose spending more in this extremely regressive manner to increase the number of uninsured and encourage the excessive use of healthcare and health insurance,? concludes Steuerle.

In another article in the special section, Bob Helms of the American Enterprise Institute explores how the tax treatment of health insurance has ?affected the competitive environment of the entire health care market? and describes several tax policy reforms that can make the market more efficient. Helms writes that ?capping the value of the tax exclusion [is] the policy approach that is likely to be the most effective, and even the policy that is likely to have the best chance of actually being adopted.? Full text of Steuerle article: www.urban.orgFull text of Helms article: www.aei.org

?The competitiveness of European and American industry depends on respect for intellectual property, and so do the health, safety and security of our citizens,? write Carlos Gutierrez, U.S. secretary of commerce and Gunter Verheugen, vice president of the European Commission. The authors announced a new agreement between the European Union and the United States to improve customs cooperation and data-sharing in the global enforcement of intellectual-property rights. They write that the number of counterfeit items seized at U.S. borders has more than doubled since 2001 and has increased by more than 1,000% at EU borders. ?Perhaps most worrying is the booming trade in counterfeit medicines, which were reckoned to account for almost 10% of world trade in medicines in 2004,? write the authors. Full text (subscription required): online.wsj.com

Governments do a poor job of measuring spending and outcomes in Medicaid, and this leads to short-sighted and faulty decisions about the best way to contain costs, writes John Graham of the Pacific Research Institute. ?Previous policies to contain Medicaid prescription spending have put low-income patients at risk of poor health outcomes and increased use of physician and hospital services – likely costing taxpayers more,? argues Graham. He argues that ?a misdirected focus on reducing prescription drug costs is likely to increase total health costs, especially for low-income patients.? Graham says that the Deficit Reduction Act gives governors new tools to improve outcomes and reduce costs. Full text: www.pacificresearch.org

In a speech given at the American Medical Association’s annual meeting, Dr. Scott Gottlieb, the FDA’s deputy commissioner for medical and scientific affairs, expressed concern about the growing number of risk management plans which are becoming part of new drug approvals. ?These plans attempt to mitigate a certain risk by directly influencing or controlling how a drug is used,? said Gottlieb. ?[T]here are some real needs that these plans address but also some real challenges we face if these plans continue to become a common feature of drug approvals,? said Gottlieb. ?In particular, there is a cumulative burden they impose that could encroach on medical practice decisions that doctors make and on patient discretion.? Full text: www.fda.gov

Technical concerns should be secondary to policy issues when crafting a framework for managing medical information, writes Edmund F. Haislmaier of The Heritage Foundation. The design of a system for managing medical data should look beyond software and hardware issues and instead focus on policy issues like ownership of health care data, patient privacy, and the ways in which information technology (IT) can improve care. ?Putting the health IT ‘cart’ before the market ‘horse’ will result in a huge expenditure of time, money, and effort on just the latest failed health policy fad,? concludes Haislmaier. Full text: www.heritage.org

Using telemedicine to remotely monitor hospital patients can save money and provide more attentive care, reports BusinessWeek. For example, Virginia-based Sentara Healthcare recently purchased an electronic intensive care unit (called eICU). This unit ?combines software, video feeds, and real-time patient information to let intensive-care specialists at Sentara Norfolk General Hospital cover 11 [intensive care units] at six hospitals, spread 60 miles apart, around the clock.? The hospital ?estimates that its eICU has saved 460 patients who would have died in traditional care.? Further, ?the cost per ICU case also fell by nearly $3,000?Much of the savings came from a dramatic plunge in complications such as hospital-acquired pneumonia and bloodstream infections, which occur more often when patients aren’t monitored by experts who understand the subtle changes in their condition.? Full text: www.businessweek.com

Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at http://www.galen.org/.

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The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.